Cottages at Foley Farms Offering On RealtyMogul

Commercial real estate investment platform RealtyMogul launched a new offering for a 321-unit cottage development in Foley, Alabama. 

The project is a ground-up, build-for-rent community featuring 321 single-family cottages. The Class A development will be built in phases and expects it will be 29 months from the time the first units are delivered until its projected stabiliztion April 30, 2025. 

Foley Farms, located 12 miles from Florida’s Gulf Coast, will have numerous on-site amenities, including a swimming pool with grilling area, fitness and business centers, 30 storage units, a pet park, 64 garages and a clubhouse. All units will be single-story cottages with parking. The project’s total cost is anticipated to be $68 million — about $212,000 per cottage. 

Foley is in Baldwin County, fastest-growing county in Alabama. Foley alone has seen a 46.7% population increase from 2010 to 2020. The influx of industry into the area has led to a job-growth rate of 26% in Baldwin County since 2011. 

The migration of businesses and population has left the housing supply unable to meet demand. Because of the housing shortage, effective rents have increased by 18.2% over the previous five-year period. Project sponsors Ritmo Properties LLC and M4 Development LLC expect to seize the opportunity to add to the Foley’s housing supply, which was not built to support rising demand in the rapidly growing city.

• Minimum investment: $35,000
• Target internal rate of return (IRR): 19.2%
• Target equity multiple: 3.56x
• Target investment term: 10 years

Ritmo Properties owner and operator Steve Strazzella has managed more than $2 billion in multifamily real estate construction and development projects for some of the largest firms in the country. 

M4 Development has extensive experience in home construction and commercial real estate development. Within the last five years, M4 has developed or is in the process of constructing, two multifamily projects, three single-family subdivisions and three build-for-rent communities.

Photo: Courtesy of RealtyMogul